Correlation Between Caseys General and Big 5
Can any of the company-specific risk be diversified away by investing in both Caseys General and Big 5 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Caseys General and Big 5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Big 5 Sporting, you can compare the effects of market volatilities on Caseys General and Big 5 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Caseys General with a short position of Big 5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Big 5.
Diversification Opportunities for Caseys General and Big 5
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caseys and Big is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Big 5 Sporting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big 5 Sporting and Caseys General is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Caseys General Stores are associated (or correlated) with Big 5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big 5 Sporting has no effect on the direction of Caseys General i.e., Caseys General and Big 5 go up and down completely randomly.
Pair Corralation between Caseys General and Big 5
Given the investment horizon of 90 days Caseys General Stores is expected to generate 0.45 times more return on investment than Big 5. However, Caseys General Stores is 2.23 times less risky than Big 5. It trades about 0.1 of its potential returns per unit of risk. Big 5 Sporting is currently generating about -0.1 per unit of risk. If you would invest 30,331 in Caseys General Stores on August 27, 2024 and sell it today you would earn a total of 12,457 from holding Caseys General Stores or generate 41.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Big 5 Sporting
Performance |
| Timeline |
| Caseys General Stores |
| Big 5 Sporting |
Caseys General and Big 5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Big 5
The main advantage of trading using opposite Caseys General and Big 5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Big 5 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Big 5 will offset losses from the drop in Big 5's long position.| Caseys General vs. MOGU Inc | Caseys General vs. iPower Inc | Caseys General vs. Jeffs Brands | Caseys General vs. Kidpik Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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